By Jordan Jardine
President Trump got into an interesting exchange with Swedish prime minister Stefan Lofven during a press conference the two leaders gave at the White House on Tuesday, March 6. The point of contention: President Trump’s proposal to slap steel and aluminum imports with heavy tariffs. The Hill reported on that same day that several Republicans and many of Trump’s own advisors took issue with the president’s idea. Despite this, Trump plans to continue fighting to get these tariffs implemented.
Trump’s position is that trade wars are a good thing, particularly for America. The United States has trade deficits with several countries in the European Union, including Sweden. Swedish Prime Minister and Social Democrat Stefan Lofven scolded President Trump prior to the aforementioned press conference, saying that “… increased tariffs will hurt us all in the long run.” Lofven went on to state that he believes trading with EU countries should be as free as possible. Trump fired back by pulling the “America is being taken advantage of” rabbit out of his ultra-protectionist hat. Trump emphasized that these tariffs will once again help the United States have a level playing field on the global economic stage.
To add insult to injury, President Trump also proposed adding a new tax on cars imported by the EU from the United States. He claimed that EU countries have a nasty habit of sending American-made cars back to the United States. Trump said he would impose a 25% tax on every car the EU sends back to America. Trump went on to say that part of the reason he got elected as President in 2016 was because he promised the American people that he would be tough on issues involving trade. Trump’s own White House is extremely divided over the president’s comments at the press conference and his remarks on the same subject of trade during the week prior. In attendance at the joint press conference in question was Secretary of Commerce Wilbur Ross, who is also a notable ultra-protectionist.
Conspicuously absent from the press conference was Gary Cohn, Trump’s National Economic Council Director. Fittingly, soon after the press conference, Cohn announced that he would be resigning from his position in “… a few weeks,” according to CNBC. This is a story where I am personally deeply conflicted. I have a strong protectionist side, but it isn’t quite as strong as that of President Trump. I disagree with Trump that high tariffs and starting trade wars are indeed good solutions to this country’s economic woes and problems with trade. I agree that we should implement some tariffs, but I would make them significantly lower than those that the president is proposing. While I understand Trump’s intentions, I also know that the road to Hell is paved with good intentions. In this case, Hell is the increased cost and heavy burden that will befall American consumers if these high tariffs are passed and implemented.
What the president needs to understand is that massive tariffs, as I have just explained, all too often only end up hurting the very people they were intended to help. I definitely agree with conservatives and libertarians when they voice that sentiment. Though I fancy myself an idealist in many respects, I know that idealism doesn’t override empirical economic reality. The economic reality is, in the long term, as tariffs increase, so does the burden that is placed on producers and, especially, consumers. President Trump needs to realize that if the economy goes down the drain again, no matter what promises he made on the campaign trail, he will bear the brunt of the blame and may lose a sizeable chunk of his voter base, thus severely calling into question his chances for re-election to the Oval Office in 2020. The president needs to be willing to hear both sides of this issue.
In addition to announcing Gary Cohn’s upcoming resignation, CNBC also reported that Trump had canceled a meeting that Cohn had arranged so the president could hear arguments against high tariffs from various American companies that utilize steel and aluminum in their respective goods. After initially agreeing to the meeting, President Trump decided to kill the meeting at the last minute, presumably to lessen the chances that his mind would be changed on this issue. This may help to explain Cohn’s sudden desire to resign from the Trump administration after over a year of service.
Trump needs to be very careful when considering his next moves. Again, I empathize with the position he is currently in. It seems to me that he is caught between pleasing his base, to whom he promised trade reforms and increased protectionism, and pleasing many of his Republican Congressional colleagues and some members of his own staff who are vehemently opposed to the ideas and proposals the president has put forward in the past couple of weeks. Whatever decision he makes will have significant implications in areas such as trade, international relations, foreign policy and our economic system here at home. It’s all in his hands now. The future of American trade hangs in the balance and the president needs to do everything in his power to ensure that said future is a bright one.